diff --git a/ckan/lib/dictization/model_save.py b/ckan/lib/dictization/model_save.py
index 540bf645c6e..4a3ff1015d8 100644
--- a/ckan/lib/dictization/model_save.py
+++ b/ckan/lib/dictization/model_save.py
@@ -381,14 +381,13 @@ def group_member_save(context, group_dict, member_table_name):
     return processed
 
 
-def group_dict_save(group_dict, context):
+def group_dict_save(group_dict, context, prevent_packages_update=False):
     from ckan.lib.search import rebuild
 
     model = context["model"]
     session = context["session"]
     group = context.get("group")
     allow_partial_update = context.get("allow_partial_update", False)
-    prevent_packages_update = context.get("prevent_packages_update", False)
 
     Group = model.Group
     if group:
@@ -418,14 +417,6 @@ def group_dict_save(group_dict, context):
             'Groups: %r  Tags: %r', pkgs_edited, group_users_changed,
             group_groups_changed, group_tags_changed)
 
-    # We will get a list of packages that we have either added or
-    # removed from the group, and trigger a re-index.
-    package_ids = pkgs_edited['removed']
-    package_ids.extend( pkgs_edited['added'] )
-    if package_ids:
-        session.commit()
-        map( rebuild, package_ids )
-
     extras = group_extras_save(group_dict.get("extras", {}), context)
     if extras or not allow_partial_update:
         old_extras = set(group.extras.keys())
@@ -435,6 +426,14 @@ def group_dict_save(group_dict, context):
         for key in new_extras:
             group.extras[key] = extras[key]
 
+    # We will get a list of packages that we have either added or
+    # removed from the group, and trigger a re-index.
+    package_ids = pkgs_edited['removed']
+    package_ids.extend( pkgs_edited['added'] )
+    if package_ids:
+        session.commit()
+        map( rebuild, package_ids )
+
     return group
 
 
diff --git a/ckan/logic/action/update.py b/ckan/logic/action/update.py
index 0cd0332efde..3cbd2abbe8d 100644
--- a/ckan/logic/action/update.py
+++ b/ckan/logic/action/update.py
@@ -523,14 +523,8 @@ def _group_or_org_update(context, data_dict, is_org=False):
     else:
         rev.message = _(u'REST API: Update object %s') % data.get("name")
 
-    # when editing an org we do not want to update the packages if using the
-    # new templates.
-    if ((not is_org)
-            and not converters.asbool(
-                config.get('ckan.legacy_templates', False))
-            and 'api_version' not in context):
-        context['prevent_packages_update'] = True
-    group = model_save.group_dict_save(data, context)
+    group = model_save.group_dict_save(data, context,
+        prevent_packages_update=is_org)
 
     if is_org:
         plugin_type = plugins.IOrganizationController
@@ -617,6 +611,9 @@ def organization_update(context, data_dict):
 
     :param id: the name or id of the organization to update
     :type id: string
+    :param packages: ignored. use
+        :py:func:`~ckan.logic.action.update.package_owner_org_update`
+        to change package ownership
 
     :returns: the updated organization
     :rtype: dictionary